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In fiscal year 2009, the child support enforcement (CSE) program collected about $26 billion in child support payments from noncustodial parents on behalf of more than 17 million children. The CSE program is run by states and overseen by the Department of Health and Human Services (HHS). States receive federal performance incentive payments and a federal match on both state CSE funds and, except for fiscal year 2008, on the incentive payments, which must be reinvested into the program. The Deficit Reduction Act of 2005 (DRA) eliminated this incentive match beginning in 2008, but the American Recovery and Reinvestment Act of 2009 temporarily reinstated it for 2 years. DRA also gave states the option to give more child support collections to families receiving public assistance--the "family first" policy--rather than using it to reimburse government public assistance costs. GAO examined (1) how CSE collections and caseloads have changed in recent years, (2) how states have responded to federal funding changes, and (3) how states have responded to DRA's "family first" policy options. GAO reviewed laws, HHS policy documents, and CSE caseload, collections, and expenditure data and interviewed HHS officials, child support experts, and CSE officials in 10 states selected for variation in program size and geography. GAO is not making recommendations in this report. HHS generally agreed with the findings in this report.

In fiscal year 2009, the CSE program experienced several departures from past trends. For one, child support collections failed to increase nationwide for the first time in the history of the program in fiscal year 2009. HHS has reported that the recent recession contributed to the 1.8 percent decrease in child support collections. In addition, the amount of collections intercepted from unemployment insurance benefits nearly tripled, while collections automatically withheld from wages--the major source of collections--decreased for the first time. Also in fiscal year 2009, the number of CSE cases currently receiving public assistance increased, reversing another long-standing trend. This change is significant because it contributed to increased numbers of hard-to-collect cases in the CSE program, as noncustodial parents of children receiving public assistance are less likely to have a child support order in place and may have low wages with little available for collections. In fiscal years 2008 and 2009, states generally maintained their overall levels of CSE expenditures, although state officials told GAO they were concerned about ongoing budgetary constraints linked to economic conditions and uncertainty about funding levels. Preliminary HHS data show that total CSE expenditures grew by 2.6 percent in fiscal year 2008 as many states increased their own funding to maintain CSE operations when the federal incentive match was eliminated. Some state officials attributed this increase in part to state lawmakers' broad support for the program. In contrast to fiscal year 2008, a different picture emerged in fiscal year 2009, when the incentive match was temporarily restored but total CSE expenditures fell slightly by 1.8 percent, which HHS officials told GAO was due to state budget constraints. Most states nationwide have not implemented "family first" policy options since DRA. Several state CSE officials GAO interviewed said they support "family first" policies in principle, but funding constraints prevented implementing these options, because giving more child support collections to families means states retain less as reimbursement for public assistance costs.